I am passionate about how we cannot let this scycle of ever decreasing cpms continue and I lay the blame at all our doors, agencies, advertisers and auditors. Exchangewire covers this topic with contributions from me. Original article here.

Click fraud has undoubtedly been one of the topics of conversation in the programmatic advertising sector in 2014, with Google’s purchase of UK-based security specialist Spider.io just one of a number of industry moves underlying its growing importance.

Last week Rocket Fuel was fingered in a FT article highlighting its prevalence in the industry (of course it was quick to rebuff the article’s assertions), but the entire advertising – from client-side marketer to third-party ad tech vendor – must accept their role to play in allowing it to continue.

This comes on the back of other articles in mainstream press – for instance a Wall Street Journal article claiming that up to a third of all web traffic is “bogus” – pressing the issue further for the online advertising sector to improve transparency over media buys taking place via automated channels.

Industry-wide measuresMoves to tackle the issue of click fraud (or bot traffic) began to gather pace last year when the IAB’s US chapter established the Traffic of Good Intent (TOGI) Task Force, in a move demonstrating that programmatic ‘media trading’ sector was maturing as braces itself to become a mainstream player, as opposed to an emergent force.

In fact during the last two weeks alone Dstillery announced it was received a patent for its fraud detection technology from the US Patent Office, this follows the news that the similarly named Distil Networks’ bagged $10m in Series A funding just last week.

More recently, the Alliance for Audited Media (formerly the Audit Bureau of Circulations) announced it was absorbing fellow auditing service ImServices.

So while it is clear that there is a near universal intention to wipe out such practices, but it’s probable that the fraudsters will always be on step ahead of the industry’s security brigade byinventing new ways to game the system (some fraudster techniques are quite comprehensively discussed here).

How can individual parties minimise the impact of click fraud?But that’s not to say that measures cannot be taken to minimise the impact of online ad fraud, and with this in mind, every tier of the industry has to take their share of the blame in letting this happen.

As discussed in previous articles in ExchangeWire everybody has their part to play in minimising the detrimental effects of elements of the ‘bad internet’, and if parties are proactively taking measures to improve things, then they’re part of the problem.

“The problem is that when an advertiser buys traffic on a fraud site, it usually comes very cheap – much cheaper than human built sites [thus opening the opportunity for arbitrage from third-party players and media agencies] – and it has good click through rates.

“So if you have fraud in your advertising mix, what you see as an advertiser is that for a small amount of money, you get a good number of clicks,” he explained.

Explore what will KPI’s look like in a post-click fraud market?He went on to further relay anecdotal evidence of the internal dynamics that encourage brand-side marketers (the people who are ultimately being ripped off here), from concealing the issue.

Indeed Cameron Hulett, Undertone, executive director, EMEA, further explains that such is the scale of the problem that most campaign benchmarks after a “post click fraud market correction” would be largely redundant.

For instance, most marketing KPIs, such as reach and traffic are drastically inflated by bogus web traffic as it currently stands, causing problems for parties on both the buy- and sell-side alike, contends Hulett.

Hence, it is in the interests of a lot of parities to let this white elephant in the room to go unaddressed, according to some.

Prioritise quality over cost-cuttingMarco Bertozzi, President Audience On Demand EMEA and North American Client Services at VivaKi, argues that the entire industry is incentivised to prioritise lower CPMs (ergo poorer quality inventory, or even bot traffic through long-tail exchanges and networks) instead of quality content (where prices are higher).

“I think educating marketers on the importance of paying more for quality inventory will need to happen because the buy and the sell side are chasing KPIs determined by said client who may be calling for lower CPMs versus quality interactions,” he says.

“If the only metric focused on by auditors and advertisers is lower cpm, then that’s where everyone will focus – turning a blind eye to the lack of quality and transparency but being happy that a lower CPM was achieved.”

Auditing has not kept up with the pace of change in the Ad Tech space. The industry still clings to CPMs and not the value of the impression and what it can deliver, according to Bertozzi.

“If you look at Search, if standard auditing metrics had been applied to search advertisers would not use it and spend would be non existent as agencies would be told to suppress the CPC. The same now applies to display, it is an auction environment and yet still they want to drive down on cpm,” he adds.

Explore alternatives to CPM pricing and last-click attributionMeanwhile, Julia Smith , a partner at consultancy firm 614 group, and acting MD of Evolve Media, argues that exploring alternative pricing models to selling media on a CPM basis, can make it easier for advertisers and their security partners to detect non-human generated traffic.

“A lot of people are all about the click, and in particular its a problem with the long-tail of sites [meaning non-premium ad networks and exchanges are a particular problem in this regard].

“We can start looking at alternative Using a cost-per-engagement [pricing] model could play an important role in combatting this. While it’s not perfect it can make it harder for click farms to replicate human behaviour.”

Sources consulted by ExchangeWire also argued that one fundamental flaw in the ad tech sector that lets poor quality traffic be traded on ad exchanges and networks is the prevalence of the last—click attribution model , which incentivises the entire industry to chase the last click.

Adit Abhyankar, Visual IQ, executive director, says: “Incentives drive behaviour. this is common sense. So if flawed attribution leads to flawed allocation of performance credit, which then leads to incorrect incentives, you can bank on the fact that, it will also lead to bad decisions.”

Meanwhile, Marco Ricci, Adloox CEO of content verification firm Adloox, argues that looking at at specific domains on ad exchanges and networks, for statistics such as CTR per domain and by publisher, is a more sophisticated method of detecting bot traffic.

AOD’s Bertozzi adds: “Attribution, econometrics, understanding business impact will all go a long way to removing an obsession on lowest cpm. It will also focus on the fact that advertisers should be challenging media partners to show where they are advertising line by line. If you have to be transparent about the media placement, you are less likely to buy the long tail.”

Employing sophisticated vetting techniquesThose ad tech players looking to perform blacklists [of sites that are known to have traffic generated by non-human traffic] should perform check such as clickthrough rate (CTR) per domain and by publisher, CTR vs conversions, and CTR vs IP addressees are all useful metrics, according to Ricci.

“We check clicks made in less than one or two seconds we can catch fraud – blink and you’ll miss it. Essentially our clients want a more granular level of transparency than the majority of the market offerings today.”

Bertozzi also argues that those players on the buy-side need to do more to improve the reputation of the sector. He adds: “We provide a rigorous vetting process called VivaKi Verified, which thoroughly evaluates media, data and tech partners to ensure that they meet our standards when it comes to brand safety, consumer privacy and client data protection.

“Rather than buy in the murky pool, we use means to avoid the problems, don’t buy in the murky pool at all.

“We have also a proprietary Quality Index that combines the [safety] signals from partners like comScore, Google, Integral Ad Science and Vindico to all the URLs we have in the AOD marketplace creating our own score.

“Metrics and standards aren’t there yet and adoption needs to happen on a larger scale, but the cost of viewable ad impressions will go up and we need to be prepared to pay them to ensure that better brand-to-consumer interactions are happening. If the only metric is cpm, we are opening up the business to gaming the system.”

So the fact is, regardless of which statistics parties in the ad tech industry subscribe to, as to the extent of the problems of bot traffic, it remains clear that more can be done to address the issues of click fraud.

Those that choose to ignore the problem (for whatever means), are helping to propagate it.

A video from the Publisher and Trading panels at Exchangewire. I was on the first panel with Nigel Gilbert, Martin Kelly and others talking about whether we think the media plan will continue into the future and how different it will look.

An early meeting with the WW CEO of ZenithOptimedia to discuss how the market is shaping up and what can be expected of 2012. As the conference season starts I am being pulled in a number of directions to make sure everyone who needs the latest info has it!

Later that morning a call with the boss, Curt Hecht, it’s a about planning stage and we discuss what we need to get done for 2012 and how we will work with the agencies. A lot of progress in 2011 for VivaKi and The VivaKi Nerve Center and so it makes for some great conversations for next year. More than ever we will be a very European organisation which is achievement in itself. a series of meetings with the major EMEA markets all to be planned.

A session on contracts, which seems to take up a lot of time at the moment, but we are making real progress with a number of contracts signed that will help power The Pool, Partnerships and AOD.

End the day back at the WW CEO’s office to finalise some notes for the conference and its my turn to start to prepare for the Exchangewire ATS event where I am on a panel with Nigel Gilbert from Orange, Gurman from MediaIQ, Breadon from AOL, Martin from infectious and hosted by Zuzanna at Microsoft. Will be a good day I am sure.

In the evening, I went to the Appnexus / Microsoft drinks and met with the founder of Appnexus, the new head of Microsoft, Andy Hart and a number of others. Bumped into Jakob of GroupM, always a pleasure and we had a little catch up and then I had to leave for dinner with Quantcast and Exchangewire down at BerryBros.

As usual you learn something on these nights and having spoken to a number of people from other groups, its clear to me that VivaKi are the most integrated and aligned group in this space, working hand and glove with the agencies. I hope over time this pays dividends for us all.

Tuesday – ATS Day

Arriving at the event really makes you see how far things have moved on in the last year. Ciaran’s first one was a big event but this really surpassed itself with 400+ guests. Unfortunately as the day went on it became clear that again it lacked publishers and advertisers. The more I think about this though, the more I think, why should they be there?

Morning sessions were OK but lacked direction, more moderation, different questioners and less keynotes would have improved the morning session. Keynotes fund these events but I feel having Mediamath and Rubicon and Appnexus all doing a turn is perhaps excessive.

Microsoft did a great session, slick presentation and I think surprised everyone, he even presented an Apple Ad, which was the talk of the Twittersphere..

The afternoon panel I was on was billed to be controversial, I knew it would not be, for two reasons. The first is we have said this before and the second is that people in the audience don’t want to stand out and make issues. The bigger these events become the more polite they will become. I had a couple of key themes I wanted to get across around the whole Ad Trading Desks.

1. We are not an Ad Network
2. We will cut back on Ad Network spend
3. We will be aiming to centralise all retargeting and we think it’s the right thing to do
4. We work with a number of DSPs just not in the UK and we know what is what

I made all of these statements as well as suggesting Ad Nets use client data across their campaigns and received no resistance so, if it was not controversial, it was not because of me! Feedback has been that it was too about positioning of each others company etc but you go where the questions take you.

All in all though, a good day, got to catch up with some great people from around the business and generally enjoyed it all.

Wednesday

We march on with an exciting morning meeting with a large European company that is soon to become Vivak’s first VNC Partner in EMEA. We have of course high profile relations with Microsoft and Google as well as other US companies, but this is the first at scale. We worked through the opportunities, what we need to do together and how we can help each other, a great start to Wednesday and we look forward to releasing that news soon.

Later that day, I 100% focused on The Pool. We have been delayed on this but we are ready to go again, very exciting, there is other info on The Pool elsewhere on my blog Later this year I am presenting at the IAB conference on Spain the results of the Spanish Lane and some of the work that’s been going on in the US, I am really excited about the results that have come from this work.

We have three great publisher partners and already two major clients so things are looking great in that regard, there will be more to come on that subject shortly.

The day ends meeting a team of senior Google Product managers who are trying to work with us to provide insight to power Audience On Demand. It’s these meetings that the Google partnership is founded on, not media spend and discounts. It was a really interesting session and we learned alot about what is coming up. Invite will be a very powerful proposition.

Thursday

A quieter day on the meetings and valuable time to catch up. I did meet up with the CEO of Vindico and team who have big ambitions in the UK. We work with them on The Pool and they are a great outfit. Its time we need to get over the control issue around video adserving, we have been through this once with display and its time we moved on when it comes to video. We are used to substandard, early 2000 type tracking and reporting which is not acceptable.

Friday

A chance to discuss everything we have been doing and seeing this week. A morning appointment with a client with a brief to talk them through all the things The Vivaki Nerve Center are working on, went brilliantly and we will be doing some great work I hope. They showed the kind of interest in innovation that makes it all worth while.

A run for the train from glamorous Slough with just enough time to read the placard under the stuffed dog at the station and down to Microsoft to present to their regional scale display teams and talk about the importance of agency trading desks. Quite a turn out and some great questions from the group, I hope we can act on some of the discussions and continue to grow our global partnership.

I end the week with some time to keep up momentum with The Pool, discuss with thepaulsilver the final touches of an exciting launch next week and what I am going to do when he is on holiday!

They threaten a nice and cosy Ad network world where the networks manage to co exist by all buying the same inventory in exchanges, using client data and passing it back to agencies at a nice margin. Let me ask a few questions:

1. Does the average client / buyer realise the Ad networks that all have nice individual sounding names are all down shopping at the same auction, forcing up the prices for our clients and making delectable margins.
2. Why is it so bad that the agencies are bringing transparency back out of the black boxes of the performance networks, so we all learn?
3.. When did an Ad network last tell you how they achieved their results? They wont as they have to expose their exchange buying techniques. Agencies can now show the workings not just the answer.
4. Why would a client be happy to spray their data around like its going out of fashion – it’s a valuable commodity that is being used by networks to power the individual client results as well as who knows what else?
5. Is the client absolutely sure that their data is not being used by an ad network to power one of the clients competitors?
6. Why are the publishers fighting tooth and nail to protect their data whilst advertisers are giving it away?

Lets balance off this debate a little and ask who the main protagonists are in the debate, perhaps there are people out to protect their business models. I will say that our clients are getting better results, more transparency and better control of their data. Does not sound too bad to me.

Finally can we stop building cases on the back of a couple of media buyers who we don’t know the identity of, who have probably not got a pay rise this year. If this was a court of law it would all be thrown out. If I were a client, I would trust the agency as we have a lot more to lose, the networks win some lose some.

In case this annoys anyone, these are my views, not the views of my organisation.

Yesterday saw Ciaran of Exchangewire fame organise his second major event. The focus of the event was the wonderful world of data trading, particularly within the exchange space. As is the way with Ciaran’s events they are less stuffy and formal and I always find the social and networking element to them very productive, as with the last trading summit the great and the good were there and it’s the quickest way to catch up with all your contacts.

The event was opened with a suitably non data introduction from Collective’s Steven Filler. Might have just been me but it felt like he realised that he had a room full of so called experts and the usual presentation would not quite wash and so swapped to more of an opening introduction to the whole event. Interestingly his opening chart was one of the most revealing of the day. Attendance was 45% ad networks, 10% agency and NO clients. A strange set of numbers when you think most people in the room were colluding on how to get rid of the ad networks. The agency figure looked low but actually there are a relatively few people in agencies fueling the exchange machines so that does not surprise, although you could argue that more people beyond that should show interest.

The Data panel was a demonstration on theory. We have one huge White elephant in the room, true attribution. Most sophisticated strategies seem to fail without this analysis and yet it was generally acknowledged that we don’t do it well enough. So we end up asking whether data works in a performance world, again the answer was more a no than a yes. The panel worked hard to try and give some texture and real examples but let’s face it, if you have the answer you ain’t telling, if you don’t you will pretend and in fact most people are doing something more simple than they are discussing.

Andy Mitchell from AN&Y then gave a far more realistic view on how publishers could use the exchange space and a little data understanding. It was a refreshingly open presentation and was quite a juxtaposition to the slightly vapour driven data panel. It’s clear from Andy’s presentation though that if you have large inventory you can get in quicker and test more. I have some sympathy with the Tim Gentry’s of this world with a smaller more precious audience to protect.

I really enjoyed talking with a number of people at lunch, especially around European expansion, with Audience on Demand live in France and Spain with other countries close behind establishing the right data, tech and inventory partnerships is important, it’s clear everyone is marching into Europe which is great as far as I am concerned. That was the best bit about lunch, the sandwiches that Ciaran’s mum made were average.

Next up Audience Science. Stuart set out to stir debate, always an admirable approach but I think in places misguided. It was the first time in the day I was glad no clients were there, too many of his inconvenient truths were in fact convenient non-truths for Audience Science new business machine. Stuart has told me this was not his intention but I am not so sure. Worse than that was on a couple of the points I believe that he did believe what he was saying, especially around our debate on RTB but he was just not right as myself and Andy Cocker could not resist telling him. I am all for debate but you have to be careful not to leave people with the wrong impression.

The buyside panel was handled quietly but eloquently by Paul Silver. Some big revelations were that data was one big bubble and that Alain from Excelate was a regular buyer of women 18-34, both created quite stir. Ciaran got into his stride and managed to pull out some quality Specific Media gags, for them it feels like gallows humour, still all good fun of course!

I have to apologise to Nick from the IAB I had to leave but I know this is a serious topic and one VivaKi are taking very seriously and being as proactive as possible. In the US we have started to work with Evidon on using user initiated icons that allow consumers to opt in or out and to change their data footprint with the data collectors. It’s one of those areas where you can keep talking or start doing. As Andy says better to be at the game than watch on telly.

Overall it was a good day, as someone commented it is a state of the nation that there were no clients and that no case studies or examples could be demonstrated. I think for the next event Ciaran should create an incentive pricing scheme for clients, let’s get them involved. I would like to see less paid for performances ( we have been guilty in the past) and more genuine speakers which may end up being one in the same but I guess that’s what we will find out.

A big thanks Ciaran for making us all feel like we have friends and getting us in one room, I look forward to the Autumn summit and what I am sure will be an even bigger turn out.